First Financial Bancorp. · NASDAQ:FFBC
First Financial Bancorp — Q4 2022 Earnings Presentation
41 slides from First Financial Bancorp's earnings presentation, Feb 14, 2023
Slide 1: Investor Presentation Fourth Quarter 2022
investor presentation • Fourth Quarter 2022 Exhibit 99.1
Slide 2: Forward Looking Statements Disclosure
forward looking statements disclosure 2 Certain statements contained in this report which are not statements of historical fact constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as ‘‘believes,’’ ‘‘anticipates,’’ “likely,” “ex
Slide 3: Forward Looking Statements Disclosure
forward looking statements disclosure 3 • financial services reform and other current, pending or future legislation or regulation that could have a negative effect on our revenue and businesses, including the Dodd-Frank Act and other legislation and regulation relating to bank products and services
Slide 4: Presentation Contents: About First Financial Bancorp
About First Financial Bancorp Financial Performance Appendix 4 presentation contents
Slide 5: Overview
overview 5 Commercial C&I, O-CRE, ABL, Equipment Finance, Treasury, Bannockburn Global Forex Retail Banking Consumer, Small Business Mortgage Banking NASDAQ: FFBC Headquarters: Cincinnati, Ohio Founded: 1863 Banking Centers: 132 Employees: 2,070 Market Cap (12/31/22): $2.3B Dividend Yield (12/31/22)
Slide 6: Key Investment Highlights
key investment highlights Proven & sustainable business model spanning 160 years • Well managed through past credit cycles • Conservative operating philosophy • Consistent profitability – 129 consecutive quarters Premier Midwest franchise with top quartile performance High quality balance sheet & ro
Slide 7: Complementary Market Centric Strategies
complementary market centric strategies Loans $2.9B / Deposits $3.0B Loans $1.7B / Deposits $5.3B Loans $4.1B / Deposits $4.3B 7 Note: Headquarters loan and deposit balances include special assets, loan marks, and other out of market and corporately held balances. Loan balances exclude PPP balances.
Slide 8: Key Business Lines
8 key business lines Full suite of diversified financial products for individuals and businesses $17.0 Billion Assets $12.7 Billion Deposits 29.86% Adjusted MRQ ROATCE Diversified financial holding company with comprehensive and innovative solutions for individuals and businesses Wealth & asset mana
Slide 9: Diversified Lines of Business
The number of Trust & Investments and RPS relationships are updated as of 9/30/22. All other data as of 12/31/22. 9 diversified lines of business
Slide 10: Revenue Growth Strategies
10 revenue growth strategies Distribution Technology Talent Product & Pricing • Regional pricing strategy • Treasury Management product investments • Investments in Product Management DefinedModels • Community • Metro • Headquarters • National • Digital Enterprise Data Management • Investment in dat
Slide 11: Digital + Technology Investments
11 digital + technology investments enabling simple, consistent & seamless customer experience across channels & making it easy for associates to provide best-in-class customer service. “
Slide 12: Bank Transformation
12 bank transformation All dollars shown in millions 1 – Tech Spend consists of data processing, communications, software / equipment depreciation & departmental expenses (primarily salaries & benefits) for the Technology, Digital & Info Security teams. 2 – Total Expense excludes Leasing Business Ex
Slide 13: Digital + Technology Highlights
• engagement • digital engagement across core customers increased 4.1% vs. Q4 2021 • consumer online banking logins increased 6.8% vs. Q4 2021 • self service • consumer online banking transaction volume increased 7.2% vs. Q4 2021 • customer satisfaction • Q4 2022 consumer mobile app rating: 4.341 13
Slide 14: Presentation Contents: Financial Performance
About First Financial Bancorp Financial Performance Appendix 14 presentation contents
Slide 15: 4Q 2022 Results
4Q 2022 results 129th Consecutive Quarter of Profitability 15 • EOP assets increased $379.5 million compared to the linked quarter to $17.0 billion • EOP loans increased $501.5 million compared to the linked quarter to $10.3 billion • Average deposits increased $261.3 million compared to the linked
Slide 16: 4Q 2022 Highlights
4Q 2022 highlights • Quarterly earnings driven by strong net interest margin and record fee income • Adjusted1 earnings per share - $0.73 • Adjusted1 return on assets - 1.63% • Adjusted1 pre-tax, pre-provision return on assets – 2.26% • Adjusted1 return on average tangible common equity – 29.86% • E
Slide 17: 4Q 2022 Highlights
4Q 2022 highlights • Adjusted1 noninterest expense of $117.3 million • Adjusted1 for $6.4 million in tax credit investment writedowns and $0.7 million of other costs not expected to recur such as acquisition, severance and branch consolidation costs • Increase compared to linked quarter driven by el
Slide 18: Adjusted Net Income
adjusted net income1 18 The table below lists certain adjustments that the Company believes are significant to understanding its quarterly performance. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial condition. See Appendix for Non
Slide 19: Profitability
profitability 19 Return on Average Assets Return on Avg Tangible Common Equity Diluted EPS 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial condition. See Appendix for Non-GAAP reconciliation. Efficiency Ratio $0.73 $0.59$0.55 $0.44
Slide 20: Net Interest Income & Margin
net interest income & margin 20 Net Interest Margin (FTE) 4Q22 NIM (FTE) Progression Net Interest Income All dollars shown in millions $5.0 $4.2 $3.9 $3.7$6.5 $1.2 $2.3 $2.6 $2.2$2.3 $5.6 $157.9 $137.9 $117.0 $106.3 $110.8 4Q223Q222Q221Q224Q21 Loan Fees Loan Accretion PPP Interest/Fees 3Q22 3.98% As
Slide 21: Asset Sensitive Balance Sheet Positioning
21 1NII – Year 1 impact, represents percentage change for immediate parallel changes in rates 2Reflects percentage of loans classified as variable rate and repricing in ≤ 1yr, hybrid variable rate repricing in > 1yr, or fixed rate, including loans held for sale 3Schedule reflects remaining maturity
Slide 22: Liquidity and Beta Profile
liquidity and beta profile 22 1Historical data adjusted for the merger with MainSource Financial Group, Inc. using the sum of the individual components. Historical Deposit and Loan Betas1 Total Deposit Beta Loan Beta Excess Liquidity Provides Significant Tailwind 26% 28% 29% 30% 29% 28% 26% 25% 1Q21
Slide 23: Liquidity and Borrowing Capacity
23 Liquidity Sources Available Borrowing Capacity Liquidity Sources • In addition to deposits, First Financial has approximately $6.0 billion of readily available funding sources to meet customer needs through the following sources: • Interest-bearing deposits with other banks • Fed funds • FHLB fun
Slide 24: Noninterest Income
noninterest income 24 Noninterest Income 4Q22 Highlights All dollars shown in thousands • Total fee income 26.2% of net revenue • Record foreign exchange income of $19.6 million; increased $7.8 million, or 66.7%, from linked quarter • Record leasing business income of $11.1 million; increased $4.0 m
Slide 25: Noninterest Expense
noninterest expense 25 Noninterest Expense 4Q22 Highlights All dollars shown in thousands • Core expenses increased due to elevated incentive costs tied to record foreign exchange income during the period and overall Company performance • $2.5 million contribution to First Financial Foundation • Adj
Slide 26: Average Balance Sheet
average balance sheet 26 Average Loans Average Securities Average Deposits All dollars shown in millions 1 Includes loans fees and loan accretion $12,632$12,371$12,538$12,784$12,885 0.51% 0.20% 0.09%0.08%0.10% 4Q223Q222Q221Q224Q21 Total Deposits Cost of Deposits $10,059$9,597$9,368$9,267$9,283 6.01%
Slide 27: Deposits
deposits 27 Deposit Product Mix (Avg) 4Q22 Average Deposit Progression All dollars shown in millions Total growth/(decline): $261.3 million -$90.1 $49.0 $9.3 -$63.4 -$8.1 $319.3 $45.3 Interest-bearing demand Noninterest-bearing Savings Money Markets Retail CDs Brokered CDs Public Funds Interest-bear
Slide 28: Loan Portfolio
loan portfolio 28 Loan LOB Mix (EOP) Net Loan Change-LOB (Linked Quarter) All dollars shown in millions Total growth/(decline): $501.5 million ICRE $3,526 34% Commercial & Small Business Banking $3,362 33% Oak Street $670 7% Franchise $276 3% Summit $307 3% Consumer $972 9% Mortgage $1,183 11% PPP $
Slide 29: Loan Concentrations
loan concentrations 29 C&I and Owner Occupied CRE Loans by Sector1 Investor CRE Loans by Property Type All dollars shown in millions 1 Excludes Summit Funding Group Property Type 12/31/22 % of Total Loans Residential Multi Family 5+ $952.5 9.24% Retail Property 790.2 7.67% Office 555.2 5.39% Hospita
Slide 30: Current Expected Credit Losses - Loans and Leases
current expected credit losses - loans and leases 30 ACL / Total Loans 4Q22 Highlights All dollars shown in thousands • $151.4 million combined ACL; $10.0 million combined provision expense • $133.0 million ACL – loans and leases; increase driven by strong loan growth and slower prepayment rates; 1.
Slide 31: Asset Quality
asset quality 31 Nonperforming Assets / Total AssetsClassified Assets / Total Assets Net Charge Offs & Provision Expense1 . 1 Provision includes both loans & leases and unfunded commitments All dollars shown in millions $7.4 $2.3 $2.0 $1.7 $(0.2) -$7.7 -$5.8 -$0.8 $8.3 $10.0 -0.01% 0.07% 0.08%0.10%
Slide 32: Capital
capital 32 Tier 1 Common Equity Ratio Total Capital Ratio Tangible Common Equity Ratio 12/31 Risk Weighted Assets = $12,923,233 All capital numbers are considered preliminary. 1 Non-GAAP financial measure which management believes facilitates a better understanding of the Company’s financial conditi
Slide 33: Capital Strategy
capital strategy 33 Strategy & Deployment Tangible Book Value Per Share • 3.8% annualized dividend yield • 31.5% of 4Q22 earnings returned to shareholders through common dividend • Most recent internal stress testing indicates capital ratios above regulatory minimums in all modeled scenarios • Commo
Slide 34: Outlook Commentary
outlook commentary1 • Loan balances expected to grow mid single digits in near term • Core deposit balances to moderately decline in near term 34 • Expected to be $109-111 million • Growth in leasing business expense as portfolio grows • Incentive expense will fluctuate with fee income Noninterest E
Slide 35: Presentation Contents: Appendix
About First Financial Bancorp Financial Performance Appendix 35 presentation contents
Slide 36: Appendix: Our Markets
appendix: our markets 36 • Greater Cincinnati/Dayton • Loans $4.5 billion • Deposits $5.4 billion • Deposit Market Share T- #4 (2.7%) • Banking Centers 50 • Fortune 500 Companies 8 • Indianapolis • Loans $0.9 billion • Deposits $0.8 billion • Deposit Market Share #14 (1.2%) • Banking Centers 10 • Fo
Slide 37: Non-GAAP Financial Information
The Company’s Investor Presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Such non-GAAP financial information should be considered supplemental to, and not as a substitute for,
Slide 38: Appendix: Non-GAAP to GAAP Reconciliation
appendix: non-GAAP to GAAP reconciliation 38 All dollars shown in thousands Net interest income and net interest margin - fully tax equivalent Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, 2022 2022 2022 2022 2021 Net interest income 157,896$ 137,892$ 117,010$ 106,345$ 110,806$ Tax equivalent adjustm
Slide 39: Appendix: Non-GAAP to GAAP Reconciliation
appendix: non-GAAP to GAAP reconciliation 39 All dollars shown in thousands Additional non-GAAP ratios Dec. 31, Sep. 30, June 30, Mar. 31, Dec. 31, (Dollars in thousands, except per share data) 2022 2022 2022 2022 2021 Net income (a) 69,086$ 55,705$ 51,520$ 41,301$ 46,945$ Average total shareholders
Slide 40: Appendix: Non-GAAP to GAAP Reconciliation
appendix: non-GAAP to GAAP reconciliation 40 All dollars shown in thousands Additional non-GAAP measures 2Q22 1Q22 As Reported Adjusted As Reported Adjusted As Reported Adjusted As Reported Adjusted Net interest income (f) 157,896$ 157,896$ 137,892$ 137,892$ 117,010$ 117,010$ 106,345$ 106,345$ Provi
Slide 41: First Financial Bancorp
41 First Financial Bancorp First Financial Center 255 East Fifth Street Cincinnati, OH 45202
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